Most consumers and professionals are more than happy with the current generation of 6-8 megapixel digital cameras. The quality is good enough for 13"x19" prints, memory usage is reasonable, and the price/performance curve is excellent. There's signs that the market in Japan and the United States is saturating as customer demand is being sated.
There is one market segment that appears to be heating up: the battle over high-end digital cameras intended primarily for studio use with 10 megapixel+ sensors. The prices -- as well as margins -- are high and many companies are starting to release models. Here's the current line-up as I see it: